Posts Tagged ‘accountable’

The word on the grapevine is that the “brand name” consulting companies are getting push back from their clients.

Why, because business owners want results not just recommendations. And the “brand name” companies may not be able to deliver.

One reason is that they use associates in their mid-twenties or early thirties, usually the recent products of MBA programs, to do the front line work. While they bring a ton of theory to a project they have absolutely no practical, operational experience.

1. Why is operational experience so important now?

It’s the difficult economic times – which, if you believe the pundits, are here to stay for much longer than in recent recessions. The pressure is on to not only get an acceptable return on every dollar spent/invested, but also to get it quickly.

But the nature of a consulting assignment – particularly strategy consulting – is that the consultant is long gone before the actual results of acting on the output from the assignment can be determined. If the output – e.g. recommended action, new systems or processes – doesn’t work the dollars spent/invested in fees will either fail to produce an acceptable return – or produce no return at all.

So unless some way can be found to keep the consultants around, or bring them back, when the actual results appear, there is no way to hold them accountable. This means that the most a client can do is minimize the risk of the new systems or recommendations failing.

2. There are at least 3 factors which affect the risk of failure.

The first is the analytical skills, knowledge of business models and process, logic and creativity the consultant applies to the situation. Even MBA’s in their mid-twenties or early thirties should have the first two.

Second is industry or subject matter knowledge. Consulting companies provide this by focusing on either one or two industries or business processes and developing repeatable “models” which they apply with future clients.

Finally there’s operational experience gained actually implementing similar recommendations or installing similar processes/systems while responsible and accountable for the results.

This kind of experience comes from holding a management/executive role in an operating company. The more senior the role, the greater the experience. Because there’s no substitute for the stomach churning, cold sweat inducing realization that the buck stops with you.

One – she will use the lessons learned from her practical experience to reduce the risk of her recommendations failing in ways that a consultant who only has theoretical or subject matter knowledge cannot.

Two – she is used to being held accountable and will expect it from a client.

4. The consulting industry has to change too.

I believe that the industry, built on telling everyone else what to do, is going to have to change itself. Consultants – particularly strategy consultants – have to develop business models which enable them to:
• Put more people with operational experience in front of clients.
• Remain involved until the results of our advice become apparent.
• Link our fees to our performance.

We, and some others, are working on ways to do both of those things (call us if you want to know more). But many are not. It’s as if the industry that’s paid to show other companies how to adapt for the future is firmly in denial.